Tag: customer recommendations

This is a post about the importance of numbers and data when doing strategic planning.

We’ll look into :
– How to Calculate the Investment in your Business Objective Based Marketing Program
– What data we need to gather in order to create a successful digital plan and strategy
– The Programs that could be associated with this business objective

A FICTIVE CASE STUDY

Say the board of a mobile company decides that one of the business objectives is to Increase the Customer Recommendations by 20% in the next 12 months.

Assume the we are talking about direct and influent recommendations (for instance as a response to a personal query “Do you like your phone? Should I buy one?”; a mere Facebook like won’t be considered a recommendation). Also this is not an exercise in online ads (ppc, etc.). We stay focused on the business objective.

So the increase program will generate in net profit about 53.5K consumer years or $10.7M over 3 years.

Say invest 20% of the potential profitability. That will generate an additional investment of 1.7M/year in the Recommendation program for a $9M profit. (I would keep this number for now and adjust it once the exact operations are determined. see Programs).

KPIS

Determine the KPIs

20% increase, from 20% to 24%
12 000 more customers to recommend the product to an average of 2 people
24 000 new customers

In conclusion:
We have 600K consumers
120K will already recommend the product
We need to get 12K more existing consumers to recommend and we have $1.7M ($142 per recommending customer or $71 per recommendation).

Having the right data is crucial. Any answer the following questions has the power to change the digital strategy.

Do we know who are the customers who already recommend?
Do we know what the customers who make recommendations have in common? (product, service, customer experience?)
Do we know to whom they are recommending the product? (friends, family, etc?)
Are the customers who make recommendations proportionally represented over social media?
Can we assume that 20% of the 8K who interact on Facebook already made a recommendation? Or are they more around 40%?

STRATEGIC CONSIDERATIONS

Once the right data is gathered the strategy writes itself.

Understand the target audience (the consumers who haven’t recommended the product yet, but are very disposed to do so)?
On what channels are they most active?
Create the tools / mechanisms for them to quickly recommend should they want to
Develop a value proposition
Tailor a creative advertising solution
Determine the types of operations / campaigns
Integrate them in the existing marketing calendar
Set up a monitoring solution
Plan for at least one or two cycles (to have an opportunity for improvement)
Execute, monitor, optimize

PROGRAMS

Determine if you have all the prerequisite programs in place.

I have started the post by defining the business objective to Increase the Customer Recommendations by 20% in the next 12 months. Now we want to attach some of the previous programs to the business objective.

What are the prerequisite programs that the client needs to have in place before tackling this objective? It all depends on what digital properties will play a role. However some of them are pretty essential.

Digital business model and objectives 101 – having a digital business model, objectives, business casesDigital analytics & monitoring 101 – determine the reporting format, and the necessary data to collect and analyseDigital and social media framework strategy and implementation 101 – determine and implement the optimal digital eco-systemSocial media policies & governance – produce, legally approve and publicize the policies, terms and rulesCommunity building and engagement 101 – develop monitoring, operations and content plans to build the social media community and its engagement
Social CRM 101 – have implemented a social CRM solution that along with the digital analytics and monitoring system will provide the proper strategic insights and support the campaigns

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This post went a bit too long and I hope you were able to follow. I have left out a bunch of small details and consideration, however I hope it was insightful. Looking forward to your comments.